Debtor in Possession (DIP) Proceedings

Debtor in Possession (DIP) proceedings occur when a company facing financial troubles files for bankruptcy under Chapter 11 in the U.S. This allows the company to continue operating while reorganizing its debts. Essentially, the company retains control of its assets and manages its business as it works on a plan to pay creditors and become financially stable again. The goal is to emerge from bankruptcy stronger, rather than liquidating assets. During this time, the company must operate under the oversight of the bankruptcy court to ensure fair treatment of creditors and comply with legal requirements.